The company behind merged mobile phone giants Orange and T-Mobile has posted a drop in sales and earnings in its first annual results.

Everything Everywhere, which was formed last year, said underlying earnings were hit by regulation costs and investment in customer contract growth.

Having announced in September that it was cutting 7.5% of its 16,000 strong workforce, the firm said turnover in the nine months to December 31 was £5.3 billion, down from £5.4 billion in the same period a year earlier. Underlying earnings were £1 billion, down from £1.1 billion.